Elliot wave technical analysis from JP Morgan on the EUR/USD:
From a note published 20Feb.
One for the Elliot Wave people out there.
- The odds for EUR/USD remain in favor of a trend extension into 1.0072
- Having basically been treading water for the last 4 weeks EUR/USD worked off most of the oversold readings without even scratching the broader downtrend.
- That said and having not even come close to the first decisive resistance cluster at 1.1660/72/79 (minor 38.2 % on 2 scales/pivot), the main question currently is whether the internal 4th wave high could be in place at 1.1534.
- In order to answer this question the market would have to break below key-supports at 1.1281 (hourly neckline) and at 1.1224/01 (pivot/minor 76.4 %).
- Above the latter, another attempt to reach out for 1.1660/72/79 can't be excluded, which would be indicated via a decisive hourly close above 1.1472 (minor 76.4 %, i.e. above 1.1490).
- In the big picture though, it takes a breakout of the outer range between 1.1679 and 1.1091 (C = A) to indicate the next big move.
- Above 1.1679 we'd see the door open for a broader recovery to 1.2042/92 (pivot/int. 38.2 % on higher scale), whereas a break below 1.1091 would only leave minor support at 1.0765 and 1.0503 (pivots) in the way before the main bear market targets at 1.0072 (76.4 %) and at 0.9298 (wave 3 projection) would come into focus